April 15, 2004

By Samantha Enslin

Durban - Game Stores, which is owned by Massmart, this year will open two new outlets outside South Africa, bringing its stores in other African countries to eight.

Stores will be opened in Kampala, Uganda in June and in Maputo, Mozambique in November.

Fanus Nothnagel, the managing director of Game, said this week: "The two new stores together account for an investment of R70 million in stock, fixtures and fittings and will represent and an initial 10-year commitment by Game to the economies of those countries of about R150 million, made up of salaries, property costs and the cost of establishing those stores."

Game is not the only retailer seeking opportunities north of the border. Shoprite has outlets in 15 African countries and Woolworths has franchise stores in nine African countries.

Metcash, Pick 'n Pay and Checkers are other retailers with interests in Africa.

Massmart owns nine wholesale and retail chains, including Makro, Builders Warehouse, Tile Warehouse and CBW.

Game has six stores in Namibia, Botswana, Zambia and Mauritius, at which about 600 permanent staff are employed. 

Nothnagel said additional turnover was among the benefits of expanding into other African countries.

"The profitability of stores in other African countries is generally better than South African stores because of limited competition in those countries and because we take slightly higher margins," Nothnagel said.

"Consumers in these countries have previously had limited general merchandise shopping options and no exposure to aggressive low pricing," he said.

From 2005 Game will open stores in Tanzania, Nigeria, Angola and Ghana.

Nothnagel said: "Logistically it is more complicated trading in other African countries and with the weak rand, competition from local and European suppliers has become stronger."

In the year to June 2003 the Massmart's mass discounters division, which includes 55 Game stores and 11 Dion stores, recorded a 17.9 percent increase in sales to R6.2 billion.

On Tuesday Massmart's shares closed 0.06 percent higher at R32.53. The general retail sector gained 0.032 percent.